A New Hope? (…But What About That Pesky Death Star?)

A long time ago in a galaxy far, far away…. It is a period of enormous change and worry. The challenges are great. The status quo of poor health care quality and crushingly high costs is bearing down on the people—but that enemy is also under attack. A growing band of folk from all parts of the galaxy are attempting to bring every imaginable force—technology, market, government, people power—to the cause. No one’s certain how it will all turn out…

Now, cue ominously Darth Vader’s imperial march theme… (Fade out).

Earlier this month, I participated in the 2011 HHS/IOM Health Data Initiative Forum and self-styled “Data-Palooza”. It was exciting. Lots of dynamic leaders attended —from the government, the software development world and other industries—lots of Twitterati—social media personalities. The place buzzed, literally. (It was just missing the Tatooine bar music.)

I couldn’t help but flash back to last year’s markedly more freshman, inaugural meeting and compare. The differences one year later were striking—even startling at times. The obvious progress could make one pretty hopeful. The vision of creating tools that use previously moribund federal (and other) data in unique ways to solve real problems is already bearing some remarkable fruit.

During the “Data-Palooza” plenary session, a parade of app developers demonstrated technology that mines and harnesses data for very cool, practical purposes. High points: PatientsLikeMe; Asthmapolis; and Multistate Foodborne Disease Outbreak Investigation System (catchy name…). The whiz bang, jaw dropping technology of these, and other, examples was impressive. Last year, one really had to suspend to imagine how all this talk might actually have a major impact. This year it could seem as if the vision isn’t keeping up with the technology. In fact, perhaps we should be bolder, much bolder.

But, then, the enormity of the challenge brings one right back down to Earth—or rather—Endor.

In spite of the great hope all this vibrant creativity inspires, one wonders about the potential, even cumulatively, of these new app tools to make a dent on our high cost, low value care problems. In the closing session, Tim O’Reilly pointedly noted that unless we find ways to move the embedded status quo health care incumbents aside just a bit—or at least find ways to open markets so that new approaches can take root, thrive, compete—all this work will be terrific—but ultimately not game changing. The status quo will soldier on, as always. In my daydream (read nightmare) I started worrying that these new technological wonders would, rather than triggering imperial defeat, instead end up being like Ewok wooden spears bouncing ineffectually off the usual huge armored imperial Walkers.

But all is not lost, of course. As we know, the rebels did ultimately destroy the death star and defeat the empire. They did it by working together and not relying on any single silver bullet (er, blaster) or group or approach. The new technology on display last week that helps people practically use data to solve tough health and health care problems is incredibly important. We just need to make sure that we’re also simultaneously doing all the other necessary things—like improving market information, adjusting payment to reward high value, waking up the sleeping health care consumer and supporting our Jedi health professionals—to allow innovation to do what it should be doing for us. That is, we need to create the conditions that will allow creativity to help us rapidly achieve sustainable high value care focused intensely on and built entirely in partnership with the patient and consumer.

Cue epilogue theme. (Roll credits).

Michael W. Painter, J.D., M.D., is a physician, attorney, health care policy advocate, and 2003-2004 Robert Wood Johnson Health Policy Fellow. He is currently senior program officer and a senior member of the RWJF Quality/Equality Team.

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“That is, we need to create the conditions that will allow creativity to help us rapidly achieve sustainable high value care focused intensely on and built entirely in partnership with the patient and consumer.”

That’s why I like Star Trek better. First it’s about Earth, not some make believe galaxy far away. Second, it’s not really fiction, because we are slowly catching up with the technology…. really… (no crazy midi-chlorians here). Third, the acting is so much better….

You may be right to stick with Kirk and co.–still no one said that just because folks are professionals that they all get to be Jedi good guys in this story. And, of course, some might even turn bad before they return from the dark side. (i.e., FFS sabors clearly disqualifies for Jedi status here).

That’s what I don’t like about Star Wars – it’s very confusing. Half the time you have no idea who’s fighting who and who the bad guys are, and it changes from episode to episode, and he (Lucas) is altering the originals as he makes up more stuff that happened before the stuff that he made up earlier. That’s cheating…. 🙂
So now it seems that your Jedi health professionals are manning the Death Stars…brandishing glowingly red FFS sabers (can’t tell until they pull that saber out) .

That’s why I like Star Trek better. First it’s about Earth, not some make believe galaxy far away. Second, it’s not really fiction, because we are slowly catching up with the technology…. really… (no crazy midi-chlorians here). Third, the acting is so much better…. 🙂

Oh, one more thing, have you noticed that there are no human doctors in Star Wars? They’re all droids. Not so in Star Trek. Not so at all….. I’m sticking with the Trekkies.

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Mike Painter

Jun 22, 2011

J.D.,

I think you just aptly described…the Death Star(s). Nice. But they do have some vulnerabilities. We just have to find them.

“…All parties involved in consumer financial transactions have an economic interest in seeing that those transactions work as smoothly as possible. Not so all parties involved in health care’s myriad transactions.

The business case for no HIT. The first step in understanding the real intrac- tability of the problem is ignoring the rhetoric. There is a veritable cottage industry involving the articulation of moral outrage over the health care quality “crisis,” much of it public relations spadework for someone’s political or commercial ambition and most of it culminating in a the naïve insistence that the system is on the verge of col- lapse and cannot go on like this. Actually, it can and will go on like this forever, ab- sent any major intervention by the nation’s largest health care purchaser—the U.S. government. Why? Because in the crude fee-for-service (FFS) reimbursement sys- tem inherited by that purchaser in the 1960s and fundamentally unchanged since then, the Las Vegas hospital has little real interest in knowing Joe’s medical history. In most cases, access to such information would represent a reduction in billable services. In an industry rife with dirty little secrets, this is health care’s dirtiest: Bad quality is good for business. And the surest road to bad quality is bad or no informa- tion. The various IT systems out there are expensive to buy, implement, and train staff to use, but this expense pales in comparison to all of the pricey and billable complications those systems would prevent.11
Health insurers’ interest. By contrast, Joe’s health insurer back in Pittsburgh has a strong interest in conveying Joe’s treatment information to whatever hospital he may end up in, to reduce its bill for Joe’s admission. But is this rational business objective powerful enough to invest in an open, accessible information system that would, at the same time, allow Joe, his coworkers, their dependents, and every doctor, hospital, pharmacy, outpatient clinic, and lab in Pittsburgh to track every penny the insurer owes them? Of course not. The only information the insurer wants to transmit readily is what it does not owe and what Joe himself has to pony up as a copayment.

The principal goal of the consumer finance industry is to increase the number of transactions. By contrast, the principal goal of the health insurance industry is to slow down transactions or lose them altogether.12 Anyone who believes otherwise is ignorant of the central metric by which a health insurer is judged by Wall Street: its “medical loss ratio.” This accounting term describes the percentage of the in- surer’s premiums paid out in medical claims. The lower the medical loss ratio, the higher the insurer’s profits and, in turn, its stock price. The conflict between this metric and the other business objectives of an insurer is the active fault line run- ning beneath the entire health insurance industry. Insurers must simultaneously please their members and providers with better service (which implies more and faster claims payments) and their employer-customers with lower medical costs (which implies fewer and slower claims payments). Given which constituency pays the bulk of the industry’s premiums, is it any wonder which one wins? If this were not the case, then the industry would not have lobbied so uniformly and furi- ously against all of the thirty-day claims payment rules proposed by numerous states.13 And, if this were not the case, the large insurers would have gotten to- gether in the 1980s, when the large banks did, and created a uniform and open transaction system that everyone could use, at every point of care in the United States. After the installation of such a system, every provider then—and everyone with an Internet connection today—would have simple and secure access to the health insurance equivalent of an ATM, through which we could track the status of all of our transactions in real time.

Providers’ interest. Providers are no less conflicted. Nearly every U.S. hospital has an ATM in its lobby, enabling secure access to patients’ financial information. Why doesn’t the ER have the equivalent for at least some of their medical informa- tion? Because not knowing is good for business. FFS reimbursement still domi- nates our health care system, Rasputin-like, after more than two decades of at- tempts to kill it.14 Those excited about the promise of “pay-for-performance,” the latest attempt to fix this problem, may wish to consult the dozen books and five hundred journal articles published in the mid-1990s about capitation. Under the past, current, and future FFS reimbursement system, Joe Wilson’s tattered insur- ance card is a blank check for a hospital; the less the hospital knows about him, the more services it can render, the more it can bill his health insurer, and the more it will collect.

Lab-testing firms’ interest. The diagnostic imaging and lab-testing businesses across the street from the hospital are equally motivated not only to do nothing bold or innovative with HIT, but to impede others’ attempts to do something. Nearly half of the $77.8 billion we would save per year by digitizing the entire U.S. health care system, according to a financial analysis by Jan Walker and colleagues, would be derived from a major reduction in lab costs, most of it by eliminating re- dundant tests.15 Is it any wonder that the three dominant U.S. lab companies have not rushed to embrace such a system? Many would like to blame it on technology, arguing that we do not have uniform standards for lab tests. This would be news to Clement McDonald and his colleagues at the Regenstrief Institute who created Logical Observations, Identifiers, Names, and Codes (LOINC), a uniform system for classifying lab tests and reporting on their values, back in 1994.16 Why have the three lab companies not installed this system to improve the transactions of those who order their tests and receive their results? It surely would have reduced their administrative costs the same way automated claims payment systems would re- duce health insurers’ administrative costs. The labs have not installed these sys- tems because, like the insurers, these administrative savings are a pittance com- pared with the economic benefits of inefficiency; in the case of lab testing, that inefficiency rings up $31.8 billion in annual sales.17 As Walker and colleagues point out with agonizing understatement, “those who depend in subtle ways on redundancy and excess could find such change costly.”18 This is health care’s second- dirtiest little secret: One organization’s unnecessary medical product or service is another’s revenue stream.

Physicians’ adoption of HIT. The list of economic impediments to HIT adoption is as long (and grim) as the list of impediments to health care system reform. A steady stream of researchers marvels at the low penetration of electronic medical record (EMR) systems in physicians’ offices, when the greater marvel is that any physician, at his or her own personal expense, would install a system that (1) costs upward of $24,000 per physician in the short run, (2) promises to reduce billable services in the long run, and (3) saves money for every health care stakeholder ex- cept the adopting physician.19 Add interoperability to the list of features of the EMR, and each of these three economic effects is magnified. Even the most mun- dane and interoperable HIT stumbles on the simplest economic obstacle: Physi- cians have a dozen reasons for not exchanging at least some e-mail with estab- lished patients, but the reduction in billable office visits—the most obvious— rarely makes the list. Given these many economic obstacles, it is noteworthy not that so few practices voluntarily computerize their clinical activities but that so many actually do…”
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